We recently published a list of Jim Cramer Talked About These 10 Stocks Recently. In this article, we are going to take a look at where Builders FirstSource, Inc. (NYSE:BLDR) stands against other stocks that Jim Cramer discussed recently.

On Tuesday, Jim Cramer, host of Mad Money, broke down the day’s market movements as he pointed to rising bond yields as the main force behind a series of notable shifts in stock performance.

“Every day around here, we have a referendum on stocks, and you can’t let it get you down because tomorrow’s vote can always be different from today’s… Why is it like this?… Well, the answer is a mischievous one.”

READ ALSO Jim Cramer’s Recent Thoughts on These 15 Stocks and Jim Cramer Put These 12 Stocks Under the Spotlight

Cramer offered a broader perspective and explained that on most days, individual stocks respond either to the movements of other stocks or to the overall direction of the market. He said that the market, in turn, often takes its cues from the bond market, which he described as its “much larger sibling.”

On Tuesday, he noted that the bond market heavily influenced stock prices. He highlighted that every downward movement in bond prices, which translates to higher interest rates, was met with negative reactions from the stock market. According to Cramer, such a relationship meant that rising rates handed the advantage to the market bears and tipped the scales in their favor during daily trading.

“So here’s the bottom line: The good news is that rates can also go up and not just down by the time we get a budget deal. The bad news is that rates are threatening to break out to the upside. And if they can’t stay calm, if they jump to a new, higher level while Congress works on the budget bill, we’re liable to have more days like today, where you need a plethora of positive themes for any given stock to break free from the gravitational pull of these darn miserable Treasurys.”

Our Methodology

For this article, we compiled a list of 10 stocks that were discussed by Jim Cramer during the episodes of Mad Money aired on May 20. We listed the stocks in the order that Cramer mentioned them. We also provided hedge fund sentiment for each stock as of the fourth quarter of 2024, which was taken from Insider Monkey’s database of over 1,000 hedge funds.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

Builders FirstSource, Inc. (NYSE:BLDR)

Number of Hedge Fund Holders: 59

Builders FirstSource, Inc. (NYSE:BLDR) was mentioned during the episode, and here’s what Mad Money’s host had to say:

“Hey, by the way, while we’re talking about building materials, can we not forget about Builders FirstSource, which is a major consolidator in what used to be a highly fragmented industry? This stock’s been a huge long-term performer, but it’s peaked early last year, and the stock has been tumbling ever since because it’s tied not too directly to a not-so-hot housing market, and that’s because of interest rates. Unlike the rest of the market, Builders FirstSource didn’t recover much in April. Then, when the company reported on May 1st, the stock went lower still because management lowered their full-year forecast.

They’re just not feeling good about single-family housing market. I don’t blame them. It’s not, it’s stagnant. With things looking so bleak for Builders FirstSource, it caught my attention last week, though, when the company disclosed that its Chairman, Paul Levy, had bought a staggering 500,000 shares in the open market for an aggregate purchase price of $55.5 million. That’s about $111 per share.

I gotta tell you, I love to see insider buying, especially when the stock’s been doing badly and the insider’s committing a significant amount of money. Levy’s the founder of JLL Partners, that’s a private equity firm that established Builders FirstSource in the late 90s. So he is been there from the get-go. He knows the business as well as anyone could, and he just increased his stake in the company by 43%.

Now I always tell you that executives sell their stock for all sorts of reasons… but they only buy their own stock in the open market for one reason: because they think it’s going to go higher. So that’s certainly an encouraging thing to see from Mr. Levy at Builders FirstSource. Consider me intrigued.”

Builders FirstSource (NYSE:BLDR) produces and distributes building materials, custom components, and construction services for residential projects. Additionally, the company provides design software and professional installation solutions tailored to industry needs.

Overall, BLDR ranks 6th on our list of stocks that Jim Cramer discussed recently. While we acknowledge the potential of BLDR as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than BLDR and that has 100x upside potential, check out our report about this cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.